Last week the federal government confirmed speculation that RECs (renewable energy certificates) rebates for home solar power systems would be reduced as of mid 2011, one year earlier than initially planned. On 1 July 2011 the solar credits multiplier will be reduced from 5 to 4.

For those who don’t fully understand how RECs work, it means that from July 2011, homes will receive a 20% smaller rebate for installing solar power, resulting in a sudden jump in the price of solar power systems.

Only households whose systems are installed (not just an order placed) before the 1 July 2011 cut off date will avoid losing out on the rebate reduction. If you’ve been thinking about solar, we strongly recommend getting the ball rolling soon as there is always a big rush as rebates draw to a close.

The reduction of the RECs multiplier in mid 2011 will mark the start of the systematic phasing out of the solar credits scheme. In July 2011 the Solar Credits multiplier will be reduced to four, then to three in 2012 and so on until the multiplier is completely phased out.